Decision guide
Multifamily Loan Maturing Soon? Run the Refinance Math Before Your Lender Does
Around $757B of multifamily debt matures by 2028 into higher rates and higher expenses. A worked 12-unit example shows how NOI, the new rate, and a lower appraisal stack into a cash-in gap — and how to model each piece before your loan comes due.
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Quick Answer
Multifamily Loan Maturing Soon? Run the Refinance Math Before Your Lender Does is worth reviewing before you trust a calculator result because the assumptions behind the model usually matter as much as the formula.
Key Takeaways
- Rebuild NOI from trailing-12 actual expenses (per-unit costs have risen sharply since 2019 — do not underwrite off the purchase pro forma)
- Compute DSCR twice: at your existing loan's payment and at the payment today's rate and amortization would produce on the same balance
- Work backwards from your lender's DSCR floor (often 1.25) to the maximum supportable loan, and compare it with your maturing balance — that difference is your cash-in gap
- Get a current value read and re-check LTV at the lower appraisal, not the purchase price
- Start 12–24 months before maturity, while NOI improvements still have time to season and a sale is still a choice
The maturity problem is three problems stacked
The backdrop: Bisnow's National CRE Finance coverage cites roughly $757B of multifamily debt coming due between now and 2028 (a WSJ figure), and about 8% of multifamily CMBS loans were delinquent in August 2026, up from 6.5% a year earlier (Trepp). When a multifamily loan matures, owners tend to watch one number: the new interest rate. The refinance actually turns on three separate effects that multiply together. First, expenses have risen — at roughly $9,510 per unit per year, a 12-unit property now carries about $114,120 a year in operating costs, which compresses net operating income before any lender math begins. Second, the replacement loan prices at today's rate, not the rate on the maturing note. Third, if values have slipped — apartment prices fell nearly 5% in the year to August 2026 — the appraisal the new loan is underwritten against is lower, so the same balance is a higher loan-to-value. Each effect is survivable alone; stacked, they are what produce surprise cash-in requirements at maturity.
A worked example: the same 12-unit property, two loans
Take a 12-unit property with $216,000 a year in scheduled rent. At 5% vacancy, effective income is $205,200. Subtract $114,120 in operating expenses ($9,510 per unit) and net operating income is about $91,100. Against the existing $1,200,000 loan at 4.25% on a 25-year amortization — about $6,501 a month, $78,010 a year — that NOI gives a debt service coverage ratio of 1.17: workable, if not comfortable. Refinance the same balance at 7.00% and the payment rises to about $8,481 a month, $101,776 a year. The DSCR falls to 0.90 — below the 1.25 floor many lenders require, on a property whose rent did not change at all.
The cash-in gap, in dollars
Work the lender's math backwards and the size of the problem becomes concrete. At a 1.25 DSCR requirement, $91,100 of NOI supports about $72,900 a year of debt service. At 7.00% on a 25-year amortization, that payment supports a loan of roughly $859,000 — against a maturing balance of $1,200,000, a cash-in gap of about $341,000 the owner would need to bring to closing, negotiate around, or avoid by starting earlier. The appraisal effect runs in parallel: a 5% value drop on a $1.8M valuation, to $1.71M, moves that $1.2M loan from 66.7% to 70.2% loan-to-value before the rate effect is even considered. Running these three numbers — stressed NOI, payment at today's rate, and supportable loan at your lender's DSCR floor — is the whole diagnostic, and it takes minutes in a DSCR calculator.
What to do 12–24 months before maturity
The owners who get hurt at maturity are usually the ones who run this math at maturity. Well before the loan comes due: rebuild NOI from actual trailing expenses, not the pro forma from purchase; get a realistic value read so the LTV side is not a surprise; and test the refinance at your lender's actual DSCR floor and today's rates, not at breakeven. If a cash-in gap appears, the options are all better early — raising NOI through rent and expense work while there is time for it to season, paying the balance down gradually, shopping lenders whose DSCR floors and amortization terms differ, or selling into a market you chose rather than one the calendar chose. None of that requires predicting rates; it requires knowing your gap while you still have time to close it.
What this math does not decide for you
A DSCR below a lender's floor does not mean a property is a bad asset, and a refinance that clears underwriting is not automatically a good deal — rate buy-downs, shorter amortizations, interest-only periods, and prepayment penalties on the existing loan all change the real comparison, and a refinance restarts the amortization clock in ways a payment comparison alone hides. This guide is educational only and is not personalized lending, tax, or legal advice. Model your own property's actual income and expenses, then confirm current requirements with your lender before making a maturity decision.
Sources and fine print
Figures drawn from Bisnow's National CRE Finance event coverage (WSJ for the $757B maturing-debt figure; MSCI for the apartment price change; Harvard Joint Center for Housing Studies for per-unit operating costs; Trepp for CMBS delinquency): https://www.bisnow.com/news/national/capital-markets/multifamilys-days-as-commercial-real-estate-golden-child-are-over. This guide is educational only and is not personalized lending, tax, or legal advice; lender DSCR floors, amortization terms, and LTV limits vary — confirm current requirements with your lender.
Checklist Before You Decide
- Rebuild NOI from trailing-12 actual expenses (per-unit costs have risen sharply since 2019 — do not underwrite off the purchase pro forma)
- Compute DSCR twice: at your existing loan's payment and at the payment today's rate and amortization would produce on the same balance
- Work backwards from your lender's DSCR floor (often 1.25) to the maximum supportable loan, and compare it with your maturing balance — that difference is your cash-in gap
- Get a current value read and re-check LTV at the lower appraisal, not the purchase price
- Start 12–24 months before maturity, while NOI improvements still have time to season and a sale is still a choice
- Check prepayment penalties and amortization restart on the existing loan before treating a lower payment as a win
FAQ
What DSCR do multifamily lenders usually require at refinance?
Many lenders underwrite to a minimum debt service coverage ratio around 1.25, though floors vary by lender, property, and loan program. At a 1.25 floor, NOI must be at least 1.25 times annual debt service — always confirm the actual requirement with your lender.
How can my property cash-flow fine today but fail a refinance?
Because the refinance is underwritten at the new loan's payment, not your current one. In the worked example, the same property and rent produce a 1.17 DSCR at 4.25% and a 0.90 DSCR at 7.00% — higher expenses and a lower appraisal can widen that gap further.
What is a cash-in refinance?
When the maximum loan a property supports at the lender's DSCR floor and LTV limits is smaller than the maturing balance, the owner brings the difference in cash to closing. In the worked example that gap is roughly $341,000 on a $1.2M balance.
When should I start running refinance math before maturity?
12–24 months out. That leaves time for NOI improvements to season into trailing financials, for balance pay-down, for lender shopping, or for an orderly sale — all of which are worse options at the maturity date itself.